When it comes to buying your first house, there are a lot of factors to consider. From getting into the right area to taking out a mortgage that suits you, Greene Realty sees these 5 tips to be vital if you are to make a good investment.
1. Do your homework.
There is a wealth of knowledge at your fingertips these days. From real estate blogs, to property stats on Zillow, try get all the information you can about the area you want to buy into. Your path to real estate success all begins with homework.
You need to get involved in all aspects of your local market. Knowing what makes a good deal a good deal, what makes a good area a good area and so on, are extremely valuable skills to have.
Keep an eye on trends as well as new listings on our website MLS search and other data sources like the West Volusia Realtors association.
2. Don’t think of two incomes as a way to increase debt spending.
A lot of first time buyers are couples who are newly married or engaged. When a joined household is created, many people feel as though they can now use the additional income to maximize debt spending. This is attractive in the short term as you can acquire all the awesome toys and the dream home you want.
When you get further down the line and factor in job instability, kids, rise in household spending etc. the debt will quickly become a burden that you wish you never had.
While we are all for low interest mortgages and investing in real estate early, we also believe cash is king! Don’t rely too heavily on debt to fulfill needs and wants.
3. It’s not just about price.
Most of us grew up being trained to recognize a deal and snatch it up before anyone else could. Many young people use this same principle when shopping for a home or investment property. “Just buy something cheap,” is the only concern.
However, what many 20-somethings forget is that price is only part of the equation. How is the neighborhood? The schools? The growth potential? There are areas in America where you can still buy a home for under $10,000.. but do you really want to buy in these areas?
Real estate is an investment that can really work for you if the right ingredients are present. Buying into up and coming areas is usually the best way to see a strong return on your land/property, but if you were to look at price alone it would be hard to find such upcoming areas.
4. Avoid variable interest rate mortgages.
A variable interest rate is a rate that changes with the market which causes your payment to increase as well. This can be an attractive prospect to home buyers who feel the interest rates may fall in the future, meaning their payment will too. These adjustable rate mortgages were one of the fundamental reasons for the 2008 financial crisis which saw close to 1,000,000 Americans lose their homes and life savings.
These mortgages can be dangerous, because there is no guarantee where the future is headed. They are more dangerous than ever at the moment. Since we are seeing historically low interest rates, it is highly improbable to expect a further decrease.
We recommend locking into a fixed interest mortgage to capitalize on the low rates we are busy experiencing.
5. Make your house work for you.
As we’ve said and you’ve heard countless times before, real estate is a wise investment. A massive reason for this is that you can potentially use your house to pay for a portion of itself, if not the whole thing.
If you purchase a home with spare rooms, these can be used as AirBnb rooms or long term rentals for students etc. which could potentially mean you live with no housing expenditure. This is especially relevant in a student town such as DeLand where you are almost guaranteed to have tenants.
This mentality forms the foundation of many a successful real estate entrepreneur. By buying houses and letting them out, you essentially have someone paying off your property. It’s the classic old saying; money makes money.
Contact us at firstname.lastname@example.org today for some advice on what areas to buy into in the West Volusia County area. We can point you in the right direction for mortgages and help you maximize your portfolios potential through rentals and property management.
- Volusia County – A Serious Contender for Hottest US Housing Market November 30, 2017
- DeLand Property Data September 5th 2017 – DeLand September 3, 2017
- Tips for earning an income off your property – Become a rental owner. July 24, 2017